Its not a loss though? Its just money flows, countries don't make profit/loss. If the capital inflows is badly invested and doesn't generate sufficient income to pay the outflows then the flows will reverse? With a reverse in inflows the dollar will drop all else being equal.
Oh look clawhammer you aren't riling me up I'm just debating, not taking it personally, always good to get an alternative perspective, it's what sites like these are for, reasoned debate. For the reasons aforementioned. A few points/things to think about: 1. While only 6% of GDP, how much of the 70% services is supported by mining? 2. How GDP is calculated. I.e. Breaking a window is GDP positive. 3. Ireland has a Current account deficit of -3.9%. Australia currently has-2.8%. A 50% drop in mining export values will raise this to -7.6%. 4. I Appreciate that the current account is not everything, however I don't agree with the "deficits don't matter" statements 5. For Mining to collapse, china and the rest of the world will have to slow down. This will not be good for Australia as a whole. 6. Try not to confuse income with GDP. I can see your arguments although I don't think it wise to look purely at contribution to GDP and direct employment numbers to ascertain an industrys importance. The financial world today is so interconnected that who knows what effect the president of Kazakastan farting has on price of tea in China.
I thought we ran CAD historically. http://www.treasury.gov.au/document...URL=03_Australias_Current_Account_Deficit.htm The only beef I have with the conclusions is that I think some of the capital inflows have been going into housing. The henry tax would have taken some of the heat out of the mining sector and eased the problem there. Little doubt in my mind the guy resigned cause the government lacked the bottle to bring it in.
Almost 3.5 years later and we're still talking about this topic as if it's just around the corner :lol: The snowflake that starts the avalanche is taking its bloody time!
I am sure glad we have had that 3.5 years. If not i would be in a horrible pickle if SHTF day had dawned at that time. JMO OC